ROGER ENGINEERING PVT. LTD.,KOLKATA vs. ITO, WARD - 12(4), KOLKATA, KOLKATA

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ITA 996/KOL/2018Status: DisposedITAT Kolkata16 November 2018AY 2013-142 pages
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What did the Tribunal hold?

The tribunal noted that the assessee's dividend income was ₹80,318/-. Following the Delhi High Court's decision in CIT vs. Joint Investment Ltd., the tribunal restricted the disallowance to the extent of exempt income.

What were the facts?

The assessee's appeal challenged the disallowance of proportionate interest and administrative expenditure under Section 14A read with Rule 8D(2)(iii). The Assessing Officer and CIT(A) had affirmed the disallowance. The assessee did not appear before the tribunal.

What were the issues?

Whether the disallowance under Section 14A read with Rule 8D should be restricted to the amount of exempt income.

Which sections of the Income-tax Act were involved?

Section 14A

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Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA

Before: Shri S.S, Godara

This assessee’s appeal for assessment year 2013-14, arises against the Commissioner of Income-tax (Appeals)-4, Kolkata’s order dated 12.03.2018 passed in case No.-1/CIT(A)-4/2016-17/Kol involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Case called twice. None appeared at assessee’s behest despite service of notice. It is accordingly proceeded ex parte.

2.

The assessee’s only substantive ground raised in the instant appeal challenges correctness of both the lower authorities action invoking u/s14A r.w.s. Rule 8D(2)iii) disallowance on proportionate interest and administrative expenditure totaling to ₹2,46,038/- over and above suo motu disallowance of ₹30,487/- in the course of assessment framed on 2902.2016 has affirmed in lower appellate proceedings. The Assessing Officer invoked u/s 14A r.w.s. Rule 8D to disallow direct expenditure, proportionate interest and administrative expenses of ₹561,82,46,038/- & ₹3,487/-;

ITA No.996/Kol/2018 A.Y.2013-14 Roger Engineering Pvt. Ltd. Vs. ITO Ward-12(4), Kol. Page 2 respectively totalling to ₹2,82,143/- as reduced to suo motu disallowance of ₹36,105/- coming to ₹2,46,038/-. The CIT(A) has affirmed the same.

3.

I have given my thoughtful consideration to Revenue’s vehement contention in support of impugned disallowance. Learned Departmental Representative fails to dispute that assessee’s divided income in the impugned Assessment Year is ₹80,318/- from dividend. I therefore restrict the impugned disallowance to the extent of exempt income only and grant part relief to the assessee in view of hon'ble Delhi high court’s decision in CIT vs. Joint Investment Ltd. 372 ITR 694 (Del).

4.

This assessee’s appeal is partly allowed in above terms. Order pronounced in open court on 16/11/2018 (S.S. Godara) Judicial Member Kolkata, *Dkp/Sr.PS "दनांकः- 16/11/2018 कोलकाता आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Roger Engineering Pvt. Ltd. P-26, Transport Depot, Kol-088

2.

""यथ"/Respondent-Income Tax Officer, Ward-12(4), Kolkata 3. संबं"धत आयकर आयु%त / Concerned CIT 4. आयकर आयु%त- अपील / CIT (A) 5. &वभागीय ")त)न"ध, आयकर अपील"य अ"धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड+ फाइल / Guard file. By order/आदेश से, // उप/सहायक पंजीकार आयकर अपील"य अ"धकरण, कोलकाता ।

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